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Harmony Profit Falls After Making Lawsuit Provision -- Update

JOHANNESBURG – Profits tumbled at South African miner Harmony Gold Mining Co. (HAR.JO) during the year that ended June 30, the company said Thursday, due to impairments at some of its mines and a provision raised for a possible lawsuit settlement.

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Harmony reported a profit of 362 million South African rand ($27.3 million) for the 12 months to June 30, down 62% from 2016, following a life-of-mine re-planning as well as a ZAR917 million provision for the possible settlement of silicosis class action suit brought against a group of South African mining companies.

For the 12 months ended June 30, Harmony reported headline earnings per share, which strip out certain exceptional and one-off items, of ZAR2.98, up 35% from a year earlier. The company, which operates in South Africa and Papua New Guinea, declared a ZAR35-cent dividend for 2017, up 70% from the previous year.

Shares of the company on the Johannesburg Stock Exchange are down 60% over the past year and 27% since the start of 2017, despite a 12% rise in gold futures since the start of the year to about $1,294 an ounce.

The company received an average gold price of $1,304 an ounce in the 12 months to June 30, up 12% from the previous year, but all-in sustaining costs also climbed 18% from the previous 12-month period to $1,182 an ounce.

Harmony produced 1,087,852 ounces of gold during the 2017 fiscal year, up 0.5% from 2016. Revenue climbed 5.1% to ZAR19.26 billion from a year earlier.